More Corruption Alleged by Diane Kleiman


By Bill Conroy

A former U.S. Senator and the operations of a major U.S. airport - JFK International in New York City - are the latest targets of allegations advanced by whistleblowers within the U.S. Customs Service.

The former senator was identified as a target of a federal task force called Firestorm, which was set up in Tucson, Ariz., more than a decade ago to investigate law-enforcement corruption that was tied to drug trafficking. The task force, which was composed of agents from several federal agencies, was shut down abruptly because it was getting too close to the truth, according to members of the G-man unit.

"The 'Firestorm' task force that was shut down overnight, was shut down as a result of one phone call, because the list of suspects included a former United States Senator...," claims Steven Shelly, a former U.S. Customs agent who was a member of the Firestorm task force. He makes that claim in a letter sent recently to several U.S. senators and a congressman. Several other sources familiar with Firestorm's operations also told the Business Journal that the former senator was in the task force's investigative sights. The former senator says he knew of the task force, but stresses he was not aware that he was being targeted for investigation by the G-man unit. He adds that any such probe would have been politically motivated, not based on any credible evidence. In a separate case that also has just come to light, a former Customs agent in New York City claims that she was asked to commit perjury by her supervisor as part of an effort to conceal the success of a drug-smuggling scheme that allegedly involved employees of a major airline. The former agent, Diane Kleiman, says she refused to go along with the cover-up and was subsequently fired as a result. Kleiman - who was based at JFK International Airport - says she attempted to make officials within Customs, as well as other federal agencies, aware of the alleged cover-up and the potential security risks it posed prior to the Sept. 11 terrorist attacks on the Twin Towers in New York. However, Kleiman claims her warnings were ignored. Kleiman's case was recently accepted for investigation by the U.S. Office of Special Council - an independent federal agency that is empowered to investigate and prosecute cases of alleged governmental misconduct and mismanagement.

"You allege that (your supervisor) took unfavorable personal actions against you in reprisal for engaging in whistleblower activity and refusing to provide false testimony before the grand jury," states a March 18 letter from the Office of Special Council to Kleiman. "You also believe (your supervisor's) actions were motivated by discrimination on the bases of race, sex and religion. "Based on the information you submitted, we have decided to refer your complaint for an investigation...." Janet Rapaport, spokesman for U.S. Customs in New York, says the agency has no comment at this time on Kleiman's case "since this is an open administrative matter that U.S. Customs is looking into."

The senator The Firestorm task force, which was conceived in January 1990, included members of the U.S. Customs Service, the Department of Justice's Office of Inspector General, the IRS, the FBI and the U.S. Attorney's Office, according to public records obtained by the Business Journal. Less than a year after its launch, in late 1990, the task force was disbanded suddenly; its investigations also were allegedly derailed and swept under the rug of history. Firestorm, at one point, had 19 cases open on alleged law-enforcement corruption, one of which involved the suspicious death of a former Customs supervisor stationed along the border. That former Customs supervisor might have been "involved in a circle of corruption in Douglas (Ariz.). ... ," according to an affidavit submitted to the Department of Treasury's Office of Inspector General by John William Juhasz. Juhasz is the Customs Internal Affairs Special Agent in Charge who spearheaded the formation of the Firestorm task force.

The public records obtained by the Business Journal also show that the Firestorm task force had unearthed evidence linking two Customs inspectors working along the Arizona border to drug traffickers. In addition, those documents contain allegations that a supervisor with the Department of Justice's Office of Inspector General (OIG) - who was suspected of having ties to drug traffickers - worked to derail the investigation into the inspectors' activities. The Customs inspectors and the OIG supervisor were still working for the federal government as recently as late last year. All of the key players in the torpedoed Firestorm task force were subsequently targeted by the government for retaliation and had their careers ruined - including Shelly, according to testimony Juhasz provided on behalf of Shelly in a 1994 workers compensation hearing. Juhasz himself was transferred out of Arizona shortly after the task force was shut down. The Business Journal was unable to locate him for comment for this story. Shelly says he has been seeking ever since to expose the truth of what happened to the task force. Part of that truth, he claims, centers around former U.S. Sen. Dennis DeConcini, D-Ariz. - who, at the time of the Firestorm task force, was still serving in the Senate. "I do know that he (DeConcini) was a target of the task force," Shelly says. Shelly concedes that he does not know the specifics of why DeConcini was a Firestorm target. DeConcini served in the U.S. Senate for three terms, from 1977 to 1995 - when he retired after choosing not to seek another term. He now works in Washington D.C. as an attorney and a lobbyist.

When confronted with Shelly's claim by the Business Journal, DeConcini characterized it as "a serious allegation" that runs counter to everything he worked to do while in the Senate. DeConcini points out that as a senator he was a champion of the U.S. Customs Service and worked to bolster the agency's resources to better fight corruption and the war on drugs. While senator, he says he was often briefed on corruption issues related to the border. "There were problems with Customs, such as inspectors allegedly waving people through," he says. "I was made aware of those things because I was chair of the subcommittee that appropriated money for Customs. And then I later served as chair of the Senate Intelligence Committee, so I would get weekly briefings on corruption issues related to the border and drugs - particularly along the Arizona border. So I was immersed in this issue while in office." DeConcini stresses that if he was being investigated by the Firestorm task force, it was politically motivated. "If I was a target of Firestorm, it was done out of malice," he stresses, "because as a senator I tried to get rid of corruption in Customs, that's what I devoted my time to, to funding law enforcement and trying to make it more responsible." DeConcini may well have been drawn into the scope of Firestorm due to politics, according to some sources in law enforcement. In particular, the former senator's political connections to a controversial Douglas, Ariz., businessman named Ronald "Joe" Borane could have triggered the task force's interest, they explain.

Back at JFK It was a lack of connections, though, that triggered problems for former Customs agent Kleiman. She was the new kid on the block when she arrived in late 1998 as a wet-behind-the-ears special agent at the U.S. Customs office at JFK International Airport in New York. Kleiman, a former assistant district attorney in New York for six years, says in the spring of 1998 she decided to trade in her law books for street smarts in order to pursue her dream of becoming a special agent and to "fulfill her desire to serve her country." After about 6 months of training for the special agents job in Georgia, Kleiman was assigned to the U.S. Customs office at JFK International. According to Kleiman, that's when her dream became a nightmare. "Immediately after arriving at JFK, I was called to a meeting by my supervisor," states Kleiman in a July 25, 2001, letter that she sent to the Office of Special Council (OSC). "... The first comment that he made to me was the following: 'Customs is like the Irish Mafia. Our form of affirmative action is hiring an Italian, so understand what your place is in this agency.' This statement was made in regards to me being a female, a Jew and an attorney." Things went downhill from there, according to Kleiman. Over the first few months of 1999, she made a series of disclosures to her supervisor that were met with harsh reactions. In a complaint filed with OSC in November of 2001, Kleiman reveals that she reported to her supervisor at JFK the use of excessive force on a suspect, several incidents of improperly handled evidence, an office gambling operation involving payouts exceeding $5,000, and the fact that there was some $300,000 unaccounted for in a case involving a large cash seizure. "When I raised my concerns with (my boss), I was told to shut up and was virtually told that if I didn't listen, I was finished," Kleiman stated, in a recent interview with the Business Journal. Then, in February and March of 1999, Kleiman says she ran up against a wall in terms of the alleged corruption within the JFK Customs office. According to her OSC complaint, during that time period, she began to work a case involving an American Airlines baggage handler, a non-citizen, who was caught twice within a few months attempting to smuggle about $30,000 in currency out of the country. "This baggage handler makes minimum wage, and after interviewing him, I felt he was engaging in criminal activity," Kleiman states in her OSC complaint. "I reported this to (my supervisor) and recommended that either we cultivate this man as an informant and watch him, or report him to American Airlines security. (My supervisor) told me to keep my mouth shut and told me If I didn't, he would make sure I was fired." About a month later, in March of 1999, Kleiman states in her OSC complaint that, with the assistance of a DEA agent, she arrested a man attempting to smuggle 46.2 pounds of cocaine into the country. The case involved a smuggling scheme whereby an American Airlines employee was allegedly being utilized to assist the smuggler to bypass airline and airport security. "... The method used by the smugglers usually involved a second individual, who customarily was seated behind the courier," Kleiman states in her July 2001 letter to OSC. "This second individual would most likely be an employee of (the airline) and would have a key to the gate at the airport. According to DEA, this was how the drugs could enter the country, bypassing a Customs check point." The former agent claims a lack of security and the failure by airlines to perform thorough employee background checks make these schemes possible to pull off. Again, in this case, Kleiman's boss allegedly told her to withhold information. "(My supervisor) ordered me to perjure my testimony before a grand jury because the defendant stated to me that he had smuggled drugs into JFK on prior occasions," Kleiman states in her OSC complaint. "(He) wanted me to omit that information from the statement because it would look like Customs wasn't doing its job, and it would embarrass the agency. "He also wanted me to lie and state that I wasn't working with DEA, because he didn't want them to share credit.... He also wanted me to omit the fact that an American Airlines employee was involved. He threatened that if I didn't comply, something bad would happen to my mother. He also stated he would put retroactive evaluations in my file and have me fired." And, according to Kleiman's OSC complaint, that is exactly what happened. After refusing to comply with her supervisor's dictates, Kleiman told the Business Journal that she was pulled off the case and not allowed to appear before the grand jury. By July of 1999, Kleiman was fired. Kleiman then filed an Equal Employment Opportunity (EEO) complaint. The subsequent investigation revealed that two sets of evaluations did exist - one of them had been altered and was dated March 22, 1999, the same day that Kleiman's supervisor had threatened to fire her, Kleiman's OSC complaint states. Kleiman's supervisor declined to comment on her allegations when contacted by the Business Journal. There have been some high-profile busts of smuggling operations involving airline employees in the past. But what makes Kleiman's story unique is the alleged cover-up by a Customs supervisor that ensued after suspects were apprehended. John Hotard, a spokesman for American Airlines, in a prepared statement told the Business Journal that the airline is "on schedule to comply with the government's (post 9/11) mandate that all employees and vendors with access to secured areas ... undergo a criminal background check." However, according to Kleiman, all the background checks in the world will not protect the American public from potential harm if Customs management continues to cover-up information in order to bolster careers, protect agency turf, or to prevent the agency's image from being tarnished. "Customs is not doing its job," Kleiman told the Business Journal. "Anything that gets in the country goes through Customs. And people in the agency are not saying anything when they see problems, because they know if they rock the boat they will get fired, or possibly even killed." Kleiman adds that in addition to filing an EEO complaint, she reported the alleged corruption and cover-ups by her supervisor to Customs Internal Affairs, the Treasury Department's Office of Inspector General and the U.S. Attorney's Office in New York. Those reports were made months prior to the Sept. 11 terrorist attacks. She claims none of those agencies has done anything, to date, to address the problems at JFK. "It's not an issue of putting more money into the agency, or combining it with some other agency," Kleiman said in her interview with the Business Journal. "It's an issue of hiring highly qualified people who care. That's the whole point. Since 9/11, people have gone back to going about their lives like it never happened. But it will happen again, unless something is changed." And change may well be in the air. Kleiman's case has caught the attention of U.S. Sen. Charles Grassley, R-Iowa. Grassley's office plans to launch a probe into Kleiman's claims, according to an aide in the senator's office. "We plan to investigate this issue," the aide says. "It's pretty serious." Entering Arizona One of Grassley's past senate colleagues, former Sen. DeConcini, says he made it a priority while in office to give Customs the muscle it needed to fight drug trafficking and the corruption it breeds. Those efforts included ushering through legislation to expand the agency's border presence and air-interdiction forces. As a result, DeConcini questions why the very same agency would make him the target of a task-force investigation. What could have opened the door to Firestorm task-force excesses, according to DeConcini, is the internal problems at Customs during the early 1990s - which is when Firestorm came online. He adds that efforts were made to reform Customs under the leadership of Raymond Kelly, who served as commissioner of Customs from 1998 until early 2001. However, DeConcini concedes that even Kelly's efforts may not have been successful, as some critics of Kelly's Customs reign contend. "There may be some truth to the argument that the problems never really were completely fixed," DeConcini adds.

The bottom line, according to some law enforcement sources familiar with Firestorm, is that it was Customs' internal problems - which included task-force information leaks - along with turf wars between federal agencies participating in Firestorm that led to the unit's demise. "That task force (Firestorm) was shut down at a time when Customs was a very weak organization internally," DeConcini explains. Officials with U.S. Customs headquarters in Washington, D.C., failed to provide a comment by deadline on why Firestorm was shut down. Still, Shelly says the speed with which the task force was dismantled, the fact that its leader was stripped of his command and transferred out of state, and the contention that the unit's ongoing investigations were torpedoed and key task-force members targeted for retaliation lead him to believe there was more to the situation than bad management and agency egos. Some clues as to what might have happened can be gleaned from an internal Customs Memorandum obtained by the Business Journal. The memorandum, dated Jan. 29, 1990, was written by Juhasz and directed to Customs Southwest regional director for Internal Affairs. "At the present time, it is an accepted fact among federal law enforcement agencies and the U.S. Attorney's Office (Tucson) that law enforcement corruption in the border communities of Arizona has reached a crisis state," the memorandum states. "It is the opinion of the SAC/IA (Special Agent in Charge of Internal Affairs) Tucson that attacking only the Customs corruption is like putting a Band-Aid on cancer. "The solution is the establishment of a multi-agency task force, to be co-located with Customs Internal Affairs, Tucson, Ariz., to deal directly and immediately with all aspects of law enforcement corruption on the Arizona border."

The memorandum then goes on to identify some potential targets for the proposed task force. "Current investigative information in this office indicates heavy involvement in the corruption of two Customs employees by an organization in Cochise County (Arizona) which is believed to include law enforcement and court officials," the memorandum states. "There are strong indications of the same type of activity in Santa Cruz County, which, like Cochise County, is adjacent to the Mexican border. "Other Federal agencies in Arizona implicate the same organizations as being part of the drug smuggling problem. The members of these organizations include...." Listed among the credits in the memorandum are a number of high-ranking police and judicial officers in Douglas and Nogales, Ariz. - including the Justice of the Peace in Douglas. In 1990, that individual was Ronald "Joe" Borane. "Borane was a target of the task force," Shelly confirms. "All this is nonsense, Arizona politics," Borane told the Business Journal in a recent interview. Nonsense, maybe. But Firestorm was not the only time the long arm of the law had reached out for Borane. Also in 1990, in May of that year, federal agents unearthed a 200-foot long tunnel connecting a suspected drug trafficker's house in Agua Prieta, Mexico, to his warehouse in Douglas. The suspect, Mexican businessman Francisco Rafael Camarena-Macias, was later indicted for running tons of cocaine through the tunnel. Arizona Assistant Attorney General John R. Evans confirms that Camarena bought the Douglas property where the warehouse was located from Borane - who also happened to be the godfather of one of Camarena's children, a fact Borane confirms. The property transaction between Borane and Camarena was investigated by law enforcement officials after the tunnel was unearthed. However, no charges were ever brought against Borane, according to Evans and other sources. Some nine years later, though, Borane was arrested in an unrelated case on drug-running, money laundering and traffic-ticket-fixing charges. Evans, who coordinated that prosecution, says Borane was ultimately convicted of two felonies related to the ticket-fixing charges and served 90 days in jail. Borane's three-year probation is now nearly completed. Although he is no longer the Justice of the Peace in Douglas, he told the Business Journal that he still owns a significant amount of real estate in the area. "When you're in a small community and you're considered politically active, which I was, and you own a lot of real-estate holdings, they (the authorities) tend to look at you," Borane explained, when asked late last year by the Business Journal why he was the subject of so much law-enforcement scrutiny. According to observers familiar with Arizona politics, Borane is still very politically active; in fact, he is considered a major player in the Democratic Party in Arizona. "Borane is an influential Democratic politician, and any statewide politician would be foolish not to develop a relationship with him," says Clarence Dupnik, who is the sheriff of Pima County - where Tucson is located. And it is politics that connects Borane to DeConcini. In fact, DeConcini describes Borane as a "friend." He says his relationship with Borane dates back to the mid-1970s, when DeConcini first met him while working on the gubernatorial campaign of Raul Castro, who served as governor of Arizona from 1975 to 1977. "I wrote a letter on his behalf to the judge at his sentencing," DeConcini says, referring to Borane's felony conviction on ticket-fixing charges. "... Joe (Borane) is one of the best politicians in southern Arizona. "... He knows how to make friends and deals, but I never knew of anything he did that was illegal." As far as the ticket-fixing conviction, DeConcini says Borane got caught up in a sting operation and was convicted. "The record speaks for itself," DeConcini adds. Some sources in law enforcement and observers of Arizona politics indicate that DeConcini's friendship with Borane, and the fact that Borane was a Firestorm target, may account, in part, for the task force's interest in the former senator. In addition, in 1990, when Firestorm was heating up, DeConcini also was under fire for his role in the multi-billion dollar collapse of Charles Keating's Lincoln Savings and Loan Association. DeConcini, along with four other senators - dubbed the Keating Five - were accused of improperly intervening with federal regulators investigating the thrift's collapse. The five senators received more than $1 million in campaign contributions from Keating. In the summer of 1991, the Senate Ethics Committee cited DeConcini for questionable conduct. DeConcini, for his part, claimed at the time that he had done nothing wrong. Still, the scandal made him vulnerable politically and opened the door for further scrutiny, political observers contend. DeConcini supporters stress, though, that any claim linking the former senator to illegal activities is way out of bounds and likely politically motivated. Sheriff Dupnik says he knows DeConcini well and finds it hard to believe he was being targeted by Firestorm. In fact, his initial reaction to the claim was that it was "absurd." "There has never been the slightest inkling that he (DeConcini) has ever been involved in anything criminal," Dupnik adds. Borane describes DeConcini as "a very honorable man." "This whole thing is a political assassination," Borane told the Business Journal. "Someone (like DeConcini) becomes a politician with influence, and all of sudden people take after him. It's an unbelievable situation; it's a nightmare." However, Shelly is unflinching in his claim that DeConcini was a target of Firestorm. He concedes that he does not know for a fact that DeConcini was responsible for pulling the plug on Firestorm, but adds "if anyone had the power to shut it down so quickly and completely, he had that power." In the end, though, it is the unanswered questions, more than anything else, that have brought the Firestorm task force back from the ashes. Juhasz puts some of those questions to the Commissioner of Customs in a letter he drafted in 1991, shortly after the demise of Firestorm: "I was recently told that I cannot participate in any activities in Arizona. I was told that to do so would 'violate the agreement,'" Juhasz states in the letter. "I ask: What agreement? Certainly none that I am a party to. The specter of some back-room, smoke-filled meeting that culminated in an agreement to 'call off the bulldog Juhasz' smacks of improprieties, unethical behavior and possibly illegal action. "The final question is: Who can exert so much political pressure in Washington, D.C., that I am not only removed from my position as (Internal Affairs/Special Agent in Charge) in Tucson, but prohibited from participating in any capacity in law enforcement activities in Arizona?" Don't rock the boat Former Customs agents Shelly and Kleiman are not alone in their efforts to blow the whistle on what they contend is a pattern of abuse within the U.S. Customs Service. Other agents and inspectors, too, have stepped forward to shine a light on the agency's problems. The allegations raised by these whistleblowers boil down to an assertion that Customs is operated through a "good-ol'-boy" system of management that is perpetuating a culture of cover-ups, reprisal and cronyism. Among the Customs Service practices exposed by these other whistleblowers and reported in prior Business Journal stories over the past year and a half include the following: . Customs management has a policy of shredding records used in disciplinary actions in order to keep those documents away from union officials - specifically the National Treasury Employees Union. The records being shredded are called "briefing papers," according to legal documents obtained by the Business Journal that detail the practice. . Sources within the federal law enforcement agency as well as documents provided to the Business Journal allege that a Customs inspector supervisor in Laredo created false drug-seizure reports in the Treasury Enforcement Communications System (TECS) using the names and Social Security numbers of Customs inspectors - making the reports read as though the inspectors had written the narratives themselves. The supervisor allegedly falsified as many as 16 drug-seizure records for the purpose of embellishing the supervisor's record. . Former U.S. Customs agent Darlene Fitzgerald-Catalan alleges that she was subjected to retaliation and severe emotional abuse, which included a death threat, that eventually led her to resign from her job in 1999. Catalan told the Business Journal that she traces the source of her problems to her investigation into a narcotics smuggling operation in Southern California that was making use of railcars to move illegal drugs across the Mexican border into the United States. She claims higher-up Customs managers - including one who had a personal vendetta against her - "torpedoed" her investigation, which Catalan contends linked the smuggling operation to the Arellano-Felix drug cartel in Mexico.

The Business Journal also has reported previously on the details of about half a dozen legal cases around the country involving charges that Customs management has engaged in far-ranging discrimination and retaliation. The cases were filed on behalf of hundreds of Hispanic Customs employees, including high-ranking investigators, inspectors and intelligence officers. These cases are of particular concern because of the large number of Hispanic citizens who interact with Customs daily. Customs is charged with safeguarding the integrity of our borders. The agency collects in excess of $22 billion annually from import duties and other fees; it processes some 480 million land, air and sea passengers each year. Among the most important and far-reaching of the legal cases filed against Customs is a class-action EEO discrimination complaint that is now pending before an administrative judge in Washington, D.C. The case encompasses a class of more than 250 former and current Hispanic Customs agents. The litigation claims that Customs systematically discriminates against Hispanic agents. Customs employees participating in the case include a former assistant commissioner of the agency and an agent who was left a paraplegic after being shot in the back by one of his supervisors during a botched drug bust. The EEO case is in the discovery phase and is slated to be heard by the administrative judge in June. The Customs agents are being represented by the Washington, D.C.-based law firm of Shaffer, Rapaport & Schmidt - which is representing African American Secret Service and Bureau of Alcohol, Tobacco and Firearms (BATF) special agents in similar class-action discrimination cases. Customs, the Secret Service and BATF are all under the umbrella of the U.S. Treasury Department. The Customs Service is a huge bureaucracy, with some 20,000 employees, which makes it a tough agency to manage by any measure. As a result, agency observers point out, Customs is going to have its share of personnel problems, like any large organization. But, critics of Customs say the agency's problems are so pervasive and pernicious that they put our national security at risk - particularly in the wake of Sept. 11. Some even contend that it is the sheer size of the agency that is the root of the problem. Gary Aldrich, founder of the Patrick Henry Center for Individual Liberty and a former FBI agent who specialized in investigating political corruption, says the underlying problem with federal agencies like Customs is that they "are so big, there is no way Washington can really manage them, beyond relying on hope and trust." "We spend millions of dollars making sure we hire good people, and then we ship them off to field offices where they run smack into corruption," Aldrich says. "Then those agents are told, 'Shut up or we'll kill you,' ... (while others simply) don't want to rock the boat. And in the meantime, these (bad) guys are out there with guns and handcuffs."

Kleiman, who lives in New York City, has a slightly different take on Customs' woes - one tied to the events of Sept. 11. She told the Business Journal that she is reminded of that "don't rock the boat" mentality every time she looks into the hole in the ground that once was the World Trade Center. Well before the World Trade Center was attacked, Kleiman claims she "knew something bad like that was going to happen" because of the indifference she encountered within the federal government in relation to the problems at Customs. "When that second jet came right over my apartment, I said (screw) Customs," recalls Kleiman, who lives a block and a half away from what is now ground zero. "Maybe now people will start to listen, but 3,000 people are already dead."

For more coverage of U.S. Customs, go to stories/2001/12/17/story1.html